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What Is Strategic HR?
Strategic HR is when Human Resources professionals use future-oriented thinking to plan and formulate solutions to business problems within the company. It is going above and beyond the administrative work, HR is known for and transitioning to a critical thinker who solves complex issues. Strategic HR may involve working on company direction at the highest levels and determining effective tactical decision-making. All strategic planning should be focused on the company’s business plan.
There are different paths for strategic HR, such as strategic talent management, staffing, compensation, DEI, and many more.
Why Is Strategic HR Important?
You may be wondering if it’s worth it to put in extra effort to be a strategic HR professional. Here are a few reasons why it can be so beneficial to a company, and your career.
- Problems should be solved at the root. HR frequently puts out figurative fires that arise within companies. If processes in the company stay the same, it’s likely that these problems will arise again and again. Solving the root issue prevents future problems, saving time and money.
- It can save the company time and money. When HR professionals use strategic thinking, it improves processes and decreases costs, contributing to a company’s success.
- It reinforces the value of HR. The ability of HR professionals to solve complex issues will increase the department’s credibility and give you a seat at the decision-making table.
Strategic HR and Data
The foundation of strategic HR lies with data analytics. As professionals attempt to solve complex issues that arise, their solutions should be grounded in data-driven practices. HR professionals may be involved in the data collection, cleaning, interpretation, and predictive analysis required to make informed decisions. Predictive analytics is especially useful with strategic HR because it uses past data to predict the future.
To some, the thought of data analytics can seem intimidating. Don’t worry; you aren’t expected to run Master’s-level statistical equations. Much of the useful information can be derived using averages, comparisons, percentages, trends, and correlations. You’ll be surprised at how well simple graphics can do the trick.
Microsoft Excel is a great platform to use for data analytic starters. Almost all of its functions can be learned through a standard internet search.
Different Types of Strategic HR
Let’s explore three types of strategic HR in a little more detail.
Strategic recruiting involves predicting and planning for vacancies that have not yet happened. By creating a plan of attack before the problem strikes, the business will be much quicker to fill open positions.
Example: You analyze turnover data from the last five years and find that large numbers of college-aged employees leave during the months of August and September to return to school. You create the job postings and organize recruitment activities on college campuses three months prior, in May, so you are prepared ahead of time to fill predicted vacancies.
Strategic Talent Management
Successful companies have well-oiled leadership pipelines and retention plans founded on strategic principles. As talent is either utilized or wasted, it’s important to create an atmosphere that promotes growth opportunities for employees. A good formula for achieving maximum results out of employees is the AMO framework:
f (results) = Ability x Motivation x Opportunity.
Each employee needs all three factors to succeed. Strategic talent management creates a system where employees grow and leadership vacancies are easily filled. This can involve skill-profiling employees, creating individualized growth plans, and assessing the overall leadership needs of the company.
Example: Analysis of company demographics reveals that 25% of senior leaders will reach retirement age within the next five years. This leads you to predict that there will be 12 senior-level positions to be filled in this time frame. You immediately begin creating succession plans and executive coaching assignments for individuals who show promise to fill those senior leadership positions. Preparing for vacancies years in advance helps make the transition of individuals smoother and quicker.
Strategic compensation involves aligning compensation structures with the company’s goals and rewarding employees for the behaviors the company needs. For example, if the company is in need of creativity, its compensation structure should reward creativity. Strategic comp also actively seeks what their unique employee group finds to be valuable. Not every employee demographic wants the same thing.
Example: The demographics of the company show that the average age of employees in the organization is between 18 and 24. You send out a survey to employees to find out what they value most. The results show high value in tuition-reimbursement programs and little interest in long-term benefits. You tailor your rewards system to match the employee voice in order to increase retention.
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Chase carries HR experience in training, recruiting, labor and employee relations, team leadership, and as a generalist. He is always building and expanding on his skills as well as looking for ways to augment his network. When he can, he looks for ways to give back by mentoring new/upcoming HR professionals.
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